Forecasts: Colorado may have to dip into reserves to balance budget

DENVER — For the first time in recent memory, Colorado lawmakers may not have to balance upcoming state budgets while worrying about exceeding constitutional revenue limits, according to quarterly economic forecasts presented Tuesday by legislative and executive branch economists.

A new law exempts hospital payments to the state from revenue caps set by the Taxpayer's Bill of Rights, the 1992 constitutional amendment that limits what the state can receive in income.

Hospitals get federal matching grants for those payments so they can serve the underinsured and uninsured.

The economists told the Legislature's bipartisan Joint Budget Committee that's the biggest reason they'll have more leeway to ensure state budgets are balanced for the fiscal year beginning July 1 and the following fiscal year.

“We want people to know that when they spend that money, they’re helping the community.

— Kate Howell, Greeley Exchange Club president-elect

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Both Natalie Mullis, the Legislature's chief economist, and state Budget Director Henry Sobanet said Colorado's economic growth will continue but not as quickly as earlier thought.

"Colorado has the lowest unemployment rate in the nation, and we are experiencing continued economic growth in part thanks to the work we've done over the last few years," he said in a House Democrats news release. "We've worked together to help small businesses grow, to boost our growing tech industry and to help Coloradans acquire the skills and training they need to get good-paying jobs — and now we're seeing the rewards."

Despite that growth, the economists said their latest estimates of income tax revenue are lower than they were three months ago, when they most recently presented their quarterly forecasts. That could require lawmakers to dip into state reserves to balance budgets during the next two fiscal years.

Mullis said the state is $136.6 million short of what's needed to fund the current budget and keep a 6.5 percent reserve required by law. Next year, she said, that figure will grow to $171.9 million.